NEA Target of a New Broadside by Conservatives : Arts: A Heritage Foundation report calls for restrictions on the kind of works the federal agency can support and accuses it of censoring traditional art forms.

The National Endowment for the Arts faced new controversy Tuesday as a conservative Washington think tank released a political broadside directed against the agency, even as several in the arts community continued a protest over a rejected grant.

In Washington, the Heritage Foundation called for specific restrictions on the kind of art the federal agency can support and leveled new accusations that the NEA has "censored" traditional art forms. The paper was the first extensive review of the NEA by the influential foundation in a decade.

The author of the Heritage Foundation report said the new study--which also calls for two separate investigations of the NEA by the General Accounting Office and outright abolition of NEA grants to individual artists and cutting-edge media--is the first project of a new "cultural policy studies office" at the foundation.

Meanwhile, NEA chairman John E. Frohnmayer was drawn into a renewed arts community dispute over his decision last October to deny a grant to support an exhibition of work by prominent Los Angeles artist Mike Kelley at Boston's Institute of Contemporary Art.

The Heritage Foundation made its name in the administration of President Ronald Reagan as an influential right-wing alternative to such liberal Washington think tanks as the Brookings Institution. The Heritage Foundation specialized in defense and economic issues for nearly all of the 1980s but moved last September, said Robert H. Knight, the author of the report and a Heritage senior fellow for cultural policy studies, to try to increase conservative focus on such issues.

Knight said the report anticipated renewal of NEA hostilities later this year.

The Heritage Foundation report broke little new ground, relying mainly on controversy over disputed grants that have become prominent in the NEA debate in 1989 and last year. However, the Heritage Foundation cited 32 allegedly controversial grants in making its charges--a number far higher than the 20 that the NEA has acknowledged have been controversial previously. The Heritage Foundation listing includes some grants that had not previously been involved in any public NEA dispute.

Knight accused the NEA of an institutional bias against "traditional forms of arts and traditional values in general," a bias against religion and of maintaining a grant-review process that amounts to "a buddy system for awarding grants to colleagues, friends and clients of panel members, who are almost uniformly avant-garde in orientation."

A Heritage Foundation press announcement of the new study described Knight as "a former Los Angeles Times editor." Knight worked as a copy editor and feature news editor in the Orange County edition of The Times for seven years, leaving the paper in 1989 to accept a fellowship at the Hoover Institution at Stanford University.

Knight called for imposition of detailed content restrictions on NEA-funded art, calling in a Tuesday telephone interview for enactment of a set of standards proposed unsuccessfully in last fall's NEA congressional debate by Rep. Dana Rohrabacher (R-Long Beach). Rohrabacher, who has said publicly this year that he has abandoned his role as the most visible conservative in the House on arts issues, proposed last year that the endowment be banned from funding a variety of art projects, including anything that could be taken as offensive on religious or sexual grounds.

"Congress should reassess its own priorities and the NEA's future," the Heritage Foundation report concluded. "NEA defenders say that the reforms contained in this year's reauthorization have solved NEA's problems. But new grants show that NEA is unable to police itself. More reforms are needed, including minimal content restrictions on federally funded art." NEA legislation passed last fall bans conflicts-of-interest by grant-panel members and restructures the allocation of the NEA's budget to state arts councils while admonishing the agency to take into account "general standards of decency" in making grant decisions.

Virginia Falck, an NEA spokeswoman, said the arts agency had not had time to review the details of the report and could not comment specifically on its allegations. "Other than that, many of these things that they bring up, we have responded to, many times over," said Falck.

Elsewhere, documents newly obtained by The Times show Frohnmayer faces a revolt from the grant-review panel that originally approved the Kelley exhibition funding. The documents show that Frohnmayer told the director of the museum proposing the show that Kelley's grant was rejected because of "grave doubts" about its artistic merit. The panel, Frohnmayer's letter said, characterized Kelley's work as "rough, dealing in a raw way with all aspects of life" and praised it as the visual equivalent of the James Joyce novel "Ulysses."